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Investors interested in venturing to Europe have 75 exchange-traded funds to choose from, according to ETFdb.com. Pacer ETFs -- a newcomer to the ETF industry -- launched two new Europe ETFs in December: The Pacer Trendpilot European Index ETF (PTEU) and the Pacer Autopilot Hedged European Index ETF (PAEU).

PTEU uses complicated technical signals to change its hedging position depending on whether the stock market outlook is bullish or bearish. PAEU switches between a currency hedged or unhedged position depending on how the euro and U.S. dollar are trading against each other.

O’Hara: We launched the Pacer Autopilot Hedged European ETF (PAEU) because we saw no other product of this kind in the market. Prior to launching PAEU, an investor could only hedge in one direction with ETFs. We wanted to create a product that took the decision-making burden off of the investor. Before PAEU, you would have had to buy VGK when you feel that the dollar is going to get weaker and sell it to buy a euro-hedged ETF with similar exposure when the dollar is getting stronger.

PAEU automatically switches between being hedged and unhedged against the euro based on trends of strength or weakness in the currency. All trends are cyclical. We simply wanted to build an ETF that could perform throughout all environments within a cycle and create excess return as a result of the strategy. We are not simply trying to neutralize currency risk, we’re trying to create excess profits through our methodology that shifts from hedged to un-hedged.

An added benefit with this approach is that owning one ETF that can hedge in both directions is more tax-efficient for the investor. It avoids having the investor create a taxable event when switching from a hedged to unhedged position (i.e. the investor doesn’t have to leave their position and buy another ETF).